What’s up with… Iliad, Eir, Ericsson and Nokia

  • Iliad heads for €10bn annual revenues
  • Ireland’s Eir is under dividend scrutiny
  • Europe’s top vendors up their in-house chip efforts

In today’s industry news roundup: Pan-European operator Iliad is on course to reach 50 million customers and top €10bn in annual group revenues this year; Irish telco Eir is growing its sales and customer numbers but is also paying significant dividends to investors and piling up massive debts; Ericsson and Nokia are ploughing more and more resources into their in-house chip developments; and much more!

Iliad, the pan-European network operator founded and owned by French billionaire Xavier Niel, continues to go from strength to strength: It shows no let-up in its ambitions and is approaching 50 million customers across its three main markets. The mobile and broadband service provider, which has its own operations in France, Italy and Poland, has reported a 10.4% year-on-year increase in full year revenues to €9.24bn and the company expects to top the €10bn annual sales target this year. Group EBITDA increased by 4.2% to €3.44bn. Iliad ended last year with 15 million mobile and 7.4 million fixed broadband customers in France, 10.7 million mobile and 207,000 fixed broadband customers in Italy, and 13 million mobile and 2 million fixed line customers in Poland. “Iliad went all out to win in 2023, gaining strong market share in France, Italy and Poland,” stated the operator’s CEO, Thomas Reynaud. “The group also transformed itself during the year, in particular by investing massively in artificial intelligence, the cloud and connectivity for businesses. We consolidated our robust financial position, enabling us to sign an agreement to become the main shareholder of Tele2 in early 2024 and to extend our geographic reach to eight countries. And we intend to stay on the winning track, as we’re aiming to become Europe’s fifth-largest telco this year!” added the CEO. Iliad, of course, has also recently tried to scale up in Italy by attempting to merge with Vodafone Italy, but that proposal was turned down by Vodafone, which has since struck an €8bn M&A deal with Swisscom.    

Another of Xavier Niel’s telecom sector investments is in Ireland, but the news there for the entrepreneur is not all positive… The Irish telco Eir has reported that its full year revenues grew by 4% to almost €1.3bn in 2023 as it attracted more mobile and broadband subscribers. Eir ended 2023 with about 1.4 million mobile customers, up by 8% compared with a year earlier, and 869,000 fixed broadband users, up by 3%. Of its mobile customers, 1.1 million are on post-paid contracts. The telco’s CEO, Oliver Loomes, claimed 2023 to be “year of significant achievements” and extolled the continuing rollout of the company’s 5G services to “a further 600 sites across 450 towns and cities in all 26 counties of the Republic of Ireland.” That’s the upside. The downside is that during the past five years, Eir’s debt has swollen to €3.2bn whilst big investors have garnered well over €2bn in dividends: In 2022 alone, Eir paid out €800m in cash dividends – last year’s €237m was down on that huge number but very substantial nonetheless. The majority shareholder in Xavier Niel, via his investment firm NJJ Telecom Europe and his pan-European telco operation, Iliad. He became the majority shareholder (65%) in 2018 and, after he took control, dividend payments rocketed. According to the Irish Times and Sunday Business Post newspapers, analysts calculate that dividend payments will continue to be at least €150m a year for the next three years. If that forecast becomes reality, Eir’s investors will have taken some €2.4bn from the business by the end of the financial year 2026 – that’s not far off the €3.5bn that Niel paid for his majority holding in Eir in 2018. What a money-spinner! Meanwhile, Eir’s debts remain obstinately high and will have to come down, fast, if Iliad and a couple of New York City-based venture funds, Anchorage and Davidson Kempner, are to continue to get the big annual dividend fix to which they have become so accustomed. Trouble could loom for Loomes, whose future actions to put a cork in the increasing debt pile could worry investors that will expect to see their investments ‘dublin’ indefinitely…

Ericsson and Nokia are ploughing much greater resources into their in-house chip development efforts, Nikkei Asia has reported, quoting Ericsson’s head of technology and strategy for business area networks, Freddie Sodergren, as saying “We saw that with 5G, it becomes much more important to do [chip development] in-house than it used to be,” before adding that its Ericsson Silicon unit now has several hundred staff working at sites in Sweden and in Austin, Texas. Such R&D is not new for the Swedish vendor, but it is ramping up its resources in this area, while Nokia, of course, has been focused on in-house chip development ever since it hit a technical brick wall with its early 5G products and decided to team up with Marvell for the development of its ReefShark chipset.  

Japanese operator SoftBank has teamed up with virtualised routing vendor Arrcus and chip giant Nvidia for a proof of concept (PoC) that “seeks to deliver data through a secure 5G network slice.” Shekar Ayyar, chairman and CEO of Arrcus, noted in this announcement: “We are thrilled to work with Nvidia and SoftBank to accelerate the deployment of secure 5G network slices. SRv6 MUP [mobile user plane] technology, developed in collaboration with SoftBank, combined with Nvidia BlueField DPUs [digital processing unit], offers a powerful solution that helps address the evolving needs of modern networks, providing advanced security and efficiency while unlocking new revenue opportunities for service providers.” SoftBank and Nvidia have been working for a while on advanced radio access network (RAN) architectures and capabilities and are among the founding members of the AI-RAN Alliance.

With demand for gigabit services, internet of things (IoT) and file-sharing apps burgeoning, enterprises are increasingly in need of LAN (local area network) technology capable of not only keeping pace with their current requirements but also capable of exceeding them as the demands of their customers also continue to evolve. Now Nokia claims to have such a solution: A new in-wall optical network terminal (ONT) that can provide fast, cost-effective, fibre-based, in-building connectivity to enterprises and campus locations alike. Traditional copper-based LANs continue to work well but they are expensive, complex to plan, install and manage, take up a lot of space and require a lot of energy to operate. Meanwhile, optical LANs exploit the inherent capabilities of fibre optic cables to provide a future-proof, high-capacity network alternative for in-building and campus connectivity that can help reduce energy costs by some 40%. Nokia says its new product is very adaptable and provides reliable, fast, and secure broadband connectivity whilst delivering gigabit speeds to enterprises and organisations, such as offices, hotels, hospitals and schools. The new Nokia ONT is part of the Finnish company’s wide optical LAN portfolio that is designed to help enterprises to meet environmental, social and governance (ESG) objectives. Furthermore, optical LANs are environmentally sustainable and use passive components thus limiting the number of energy-consuming elements within the network. Nokia adds that the new ONT can extend the reach of an optical LAN network in an enterprise to deliver a significantly enhanced data capacity to staff using video, voice and data-intensive apps over the network. In that regard, the ONT is able to power additional endpoint devices, such as access points or cameras, and can be securely mounted on the wall to help save space and reduce the chances of damage or theft. Geert Heyninck, the general manager of broadband networks at Nokia, commented, “Today, we have more than 600 customers, including hospitality, healthcare, airports, and universities around the globe [that] are deploying the new ONT and the number continues to grow. Helping to reduce TCO [total cost of ownership] by as much as 50%, optical LAN provides enterprises with significant operational and sustainable benefits that, collectively, can help reduce the energy and CO2 emissions of the IT networks they run.” 

Private equity firm KKR has pledged to invest $400m in Pinnacle Towers in the Philippines, the US Department of Commerce noted as part of a broader announcement about US private sector investments in the Asian nation that cement the “strong bilateral trade and investment relationship” between the two countries. KKR plans to develop and acquire roughly 2,000 towers to support digital connectivity across the Philippines” and will look to “do more to support national infrastructure and development priorities,” in the country.

As the search continues to find alternatives to lithium-based battery technology, South Korean scientists have discovered a new way to use carbon dioxide plasma systems to bring about a three-fold increase in the efficiency of lithium extraction. The development of lithium-ion battery technology in smartphones, laptops and other handheld devices continues apace while the ramp-up in the global production of electric vehicles, together with the ever-increasing requirement for energy storage power batteries, means that more and more of the rare, expensive, difficult-to-extract and highly polluting element must be mined. Such mining will continue for many years to come but, it is hoped, worldwide reliance on mined lithium will dwindle as alternative battery technologies are developed to the point of commercial production. It cannot be denied that environmental fallout from lithium mining is evident and far-reaching: In the regions where lithium is mined by traditional methods, massive quantities of fresh water, which are actually already classified “precious resources” in those regions, are diverted to use in lithium mining operations resulting in air and water pollution (including groundwater pollution), land degradation and the release of massive amounts of carbon dioxide, as well as having other devastating effects on local communities, wildlife and agriculture. Lithium can be directly mined from rock, but a much cheaper method involves pumping lithium-enriched brine up from bore holes to the surface and into huge ponds, which are then left to evaporate over time. The concentrated brine is then processed to extract lithium. This method is unsustainable in the long term, hence the search for alternatives. However, lithium mining will, perforce, continue for the foreseeable future, which is why scientists are looking at ways to improve current lithium production techniques. One promising development reported by a team of researchers from the Korea Institute of Fusion Energy (KFE), shows that one way to do so is to apply carbon-dioxide microwave plasma technology. In experiments, the scientists demonstrated a tripling of the extraction rate of lithium extraction and concomitant decrease in pollution. In the Korean experiments, the scientists used carbon dioxide microwave plasma technology to extract lithium from brine. It involved ionising carbon dioxide into a plasma state, which immediately increased the rate of lithium extraction by a factor of three. Plasma is often referred to as the “fourth state of matter” and is created by applying electricity to a gas, which then becomes ionised and consists of electrons, various types of ions, radicals, excited atoms, molecules and neutral ground state molecules. In a paper, ‘Novel approach for recovering lithium from simulated aqueous solutions using carbon dioxide microwave plasma’, the KFE writes that the carbon dioxide plasma methodology resulted in a lithium extraction rate of 27.87%, three times that of the traditional method. The team hopes to progress the technology to the point at which plasma-based lithium extraction from ordinary sea water (which contains low concentrations of lithium) will be possible. Suk Jae Yoo, the president of KFE, commented: “This research shows a new possible use for plasma technology, which has been used extensively in cutting-edge fields, such as semiconductors. Lithium obtained from seawater is a crucial component of fusion energy generation, and we will continue to conduct research into both fusion energy development and fusion energy fuel acquisition.”

- The staff, TelecomTV

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